Is maintaining dark revenue a symptom of an old-fashioned telco?

Written by on May 15, 2017 in Billing & Payments, Opinion with 0 Comments

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It almost seems impolite to talk about dark revenue, but we should. Dark revenue arises in several different forms.

There is the overage model. Keep your data caps low and your customers will break through their limit. You can then charge overage.

There is the paper bill. In an effort to become sustainable, green and generally environmentally friendly, you can charge for a paper bill in order to make people choose digital.

There are others. One such made TV news the other day. Directory enquiry (and now a host of other) company 118 118 was fined for charging like a wounded bull for directory enquiry services without, it seems, any justification, except that ‘they could’.

You can see the thinking behind leaving dark revenue alone. Customers suffer from inertia so they will probably stay with you, even if you have to quietly take more and more money out of their accounts. And if you point out that they should actually move to a better plan, then surely they might wake up, smell a rat, and churn.

The same is true of paper bills. It is easy to hide behind the environmental argument. But there are still people out there who do not have computers, let alone email or broadband. Generally, they are old people. Generally these people suffer from chronic inertia, have been with their (probably the incumbent) supplier since they installed the telephone on the hall table and are on the most expensive plan.

To hit this group with charges for printed bills is dark indeed.

And the thinking behind hanging on to dark revenue so as not to upset the apple cart is flawed.

Take the risk and engage with your customers and good things happen.

As Jennifer Kyriakakis, one of the founders of MATRIXX Software says of their engagement with Telstra, “what we found was that while there was real traditional telco nervousness about addressing ‘bad’ revenue, income from overage charges for instance, there was enough pressure from the top to act”.

On this occasion, a CEO with vision and who was brave enough to tackle the problem – in this case bill shock from unclear and confusing bills – took the risk. “What actually happened”, says Kyriakakis, “was that traffic to their call centres dropped 40% within three months and the NPS score was up 23 points. It was jaw dropping.

The other surprise was that customers actually moved to larger plans, not smaller ones, which was the ‘old telco’ fear. ARPU went up five percent. What this does, not just from our point of view, but the industry as a whole, is prove that improving the customer experience makes huge sense financially”.

As telcos continue to grow up into digital beings, the advice seems clear. Do not be afraid to shake loose from the old ways.

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Alex Leslie

About the Author

About the Author:

Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews.

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